How to Hook Up Your Home to the Smart Grid Today

This is your house on the smart grid. What the future of home appliances will look like when we're managing our electricity better.

Smart energy management is becoming common among utilities across the United States. But the smart grid—a catch-all term for an upgraded electrical grid that leverages two-way digital meters to monitor power use, keep track of home electricity costs, and integrate renewable energy sources—is still a nascent technology. That will change quickly, though. In the next five years, smart meters, electric vehicles, and smart appliances are all going to grow in popularity, and when they do, the smart grid will take off.

Take a look at your electrical meter. Does it have a digital read-out? If so, it might be a smart meter, or a two-way electrical meter that constantly sends information about energy use to your local utility. Many utilities are rolling out smart meters as fast as possible, and for good reason. Smart meters make it easy for utilities to adjust electricity pricing to account for the unpredictability of renewable energy sources, which are quickly becoming part of the energy mix. Electricity prices may rise, for example, when solar power is unavailable. In theory, this should reduce pressure on the grid during times when there isn't as much electricity available.

A handful of smart meter-equipped homeowners currently have access to energy use and pricing information via energy monitoring tools like Google PowerMeter and Microsoft Hohm. But a slew of upcoming smart grid-connected appliances will make it easy to schedule energy-sucking devices to run only when prices are low.

GE is getting ready to roll out a range of smart appliances, including microwaves, oven ranges, hot water heaters, and dryers. Some of the appliances go into lowpower mode when overall grid energy consumption is up, and others feature on-board displays that signal when electricity is cheap. All of the appliances can be scheduled to run when electricity prices are lowest.

The appliances, many of which will become commercially available later this year, won't be cheap—smart water heaters (available now) cost up to $1,500 compared to $500 for a standard water heater today—but they pay for themselves in energy savings within 10 years.

Appliances may be the biggest energy vampires in today's homes, but plug-in hybrid and electric vehicles are set to emerge as a major source of electricity consumption in the near future. If everyone on your street decides to charge up their EVs at the same time, the grid could quickly be overloaded. That's why new companies are quickly popping up to manage EV charging. Juice, a startup backed by consumer electronics giant Belkin, is working on a smart EV charging system that uses software to charge up car batteries when electricity is cheapest.

Automakers are also taking an interest in the issue—Ford recently teamed up with Microsoft Hohm to optimize vehicle charging for the 2011 electric Ford Focus. Ford imagines that an in-vehicle Hohm system could eventually do everything from scheduling a washing machine to run at off-peak electricity times to letting drivers see if a house has the correct wiring to accommodate an EV.

Perhaps the best example of how the smart grid will transform our daily lives comes from Japan, where Toyota is testing its Smart Center, an all-in-one system that connects homes, vehicles, and utilities into a home-based energy management hub. The Smart Center syncs with Toyota plug-in hybrids for charge monitoring and scheduling via a smartphone and allows remote energy monitoring and coordination (taking into account power consumption, solar panel electricity production, and electric heat pump hot water volume, among other things).

This is the energy efficient home of the future—a house with an array of appliances, devices, and vehicles that communicate with utilities to keep the renewable energy-reliant electrical grid running smoothly. And it's coming soon to a city near you.